MARKET WRAP: Sensex gains 220 pts, ends above 40K as PSBs, IT stocks rally

Topics Markets | MARKET WRAP

Bulls continued to dominate Dalal Street on Wednesday amid buying in select blue-chip counters such as SBI, TCS, Infosys, RIL, and ITC. The benchmark S&P BSE Sensex reclaimed the crucial 40,000-level as the investor sentiment remained upbeat amid better-than-expected September quarter results for key companies and reports that dividend distribution tax (DDT) may be scrapped.

The S&P BSE Sensex added 220 points or 0.55 per cent to end at 40,052. SBI (up nearly 3.50 per cent) emerged as the top gainer and YES Bank (down nearly 4 per cent) the biggest loser. During the day, the index hit a high and low of 40,178.12 and 39,805.11, respectively.

In the broader market, the S&P BSE MidCap index ended at 14,697, up 0.65 per cent while the S&P BSE SmallCap index gained 0.36 per cent to settle at 13,431 levels.

On the NSE, the Nifty50 index ended at 11,844, up 57 points or 0.49 per cent. Out of 50 components, 28 ended in the green and 22 in the red. 

Among the sectoral indices on the NSE, state-run banks advanced the most, followed by IT and FMCG counters. The Nifty PSU Bank ended at 2,413.40, up around 4 per cent. On the flip side, realty and media stocks slipped the most in trade. 

BUZZING STOCKS

Shares of BEML surged 10 per cent to hit a fresh 52-week high of Rs 1,108 in the intra-day deals on the BSE on report that the government has started the divestment process of the state-owned commercial vehicles' company. The stock eventually settled at Rs 1,053 apiece, up over 4 per cent. 

State-owned Bharat Heavy Electricals Ltd (BHEL) zoomed 14 per cent to Rs 61.30 apiece on the BSE after global brokerage firm CLSA upgraded the stock to 'Buy' from 'Sell' owing to the benefits that the company could reap due to government's stake sale. The stock ended at Rs 59 apiece on the BSE, up nearly 10 per cent. 

Graphite India settled around 3.50 per cent lower at Rs 282.55 on the BSE after the company reported a sharp 83 per cent year-on-year (YoY) decline in the consolidated net profit at Rs 185 crore in September quarter, due to lower realisaton. The graphite electrode manufacturer had profit of Rs 1,113 crore in the year-ago quarter.

United Bank settled 20 per cent higher at Rs 8.90 apiece after the lender posted profit of Rs 124 crore against loss of Rs 883.2 crore in the year-ago period. 

GLOBAL MARKETS 

A rally in global shares stalled on Wednesday, with Asian shares slipping from three-month highs, as the prospect of a rate cut by the Federal Reserve was countered by worries a Sino-US first-stage trade deal could be delayed. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.33 per cent from Tuesday's three-month high while Japan's Nikkei lost 0.57 per cent after hitting a one-year high the previous day. China's CSI300 of Shanghai and Shenzhen shares fell 0.49 per cent. 

In commodities, oil prices slipped. Brent crude was down 7 cents, or 0.1 per cent, at $61.52 a barrel. US West Texas Intermediate (WTI) crude was down 15 cents, or 0.3 per cent, at $55.39 a barrel after reaching a low of $55.16.

(With inputs from Reuters)


4:00 PM IST Market is positive in expectation of fresh reforms from the government and change in the long-term capital gain tax in the future. After a long time, market is seeing incentive to invest in equity due to reduction in taxation producing better than expected Q2FY20 result, providing a hope that earnings growth will revamp further in H2FY20. Results are adding fuel to the market  despite weakness in other global markets ahead the Fed interest rate decision and US-China trade talks agreement.

3:57 PM IST

3:57 PM IST

3:39 PM IST The S&P BSE Sensex added 220 points or 0.55 per cent to end at 40,052 while NSE's Nifty50 index ended at 11,844, up 57 points or 0.49 per cent. 

3:01 PM IST

2:54 PM IST -- Net profit at Rs 124 cr vs loss of Rs 883.2 cr YoY -- Gross NPA at 15.51% -- Net NPA at Rs 5,381 cr -- Provisions at Rs 436 cr

2:50 PM IST -- Impacted by Jio phones in bottom-end market, i.e. feature phones. -- Recommended that Nil termination charges be deferred by 3 years

2:48 PM IST Shares of Graphite India slipped 5 per cent to Rs 279 on the BSE on Wednesday after the company reported a sharp 83 per cent year-on-year (YoY) decline in the consolidated net profit at Rs 185 crore in September quarter, due to lower realisaton. The graphite electrode manufacturer had profit of Rs 1,113 crore in the year-ago quarter. READ MORE 

2:42 PM IST

LIVE UPDATES

MARKET COMMENT | Vinod Nair, HoR, Geojit Financial Services

Market is positive in expectation of fresh reforms from the government and change in the long-term capital gain tax in the future. After a long time, market is seeing incentive to invest in equity due to reduction in taxation producing better than expected Q2FY20 result, providing a hope that earnings growth will revamp further in H2FY20. Results are adding fuel to the market  despite weakness in other global markets ahead the Fed interest rate decision and US-China trade talks agreement.

Sectoral gainers and losers on the NSE


Top gainers and losers on the S&P BSE Sensex


CLOSING BELL

The S&P BSE Sensex added 220 points or 0.55 per cent to end at 40,052 while NSE's Nifty50 index ended at 11,844, up 57 points or 0.49 per cent. 

RESULTS IMPACT | United Bank jumps 20% post Q2 nos


Earnings Alert | United Bank of India Q2 result

-- Net profit at Rs 124 cr vs loss of Rs 883.2 cr YoY

-- Gross NPA at 15.51%

-- Net NPA at Rs 5,381 cr

-- Provisions at Rs 436 cr

Concall Alert | Hope govt will take balanced approach on AGR matter for long-term viability: Bharti Airtel

-- Impacted by Jio phones in bottom-end market, i.e. feature phones.

-- Recommended that Nil termination charges be deferred by 3 years

Graphite India slips 5% as Q2 net profit falls 83% YoY to Rs 185 crore

Shares of Graphite India slipped 5 per cent to Rs 279 on the BSE on Wednesday after the company reported a sharp 83 per cent year-on-year (YoY) decline in the consolidated net profit at Rs 185 crore in September quarter, due to lower realisaton. The graphite electrode manufacturer had profit of Rs 1,113 crore in the year-ago quarter. READ MORE 


Ahead of Earnings | Tata Global Beverages


NEWS ALERT | No case for lower tax on super-rich: sources to CNBC TV18

-- Rich taxed much lower than global peers

-- Fin Min has concerns over big-ticket Direct Tax rationalisation

NEWS ALERT | Pressure on govt to reduce income tax for middle class, increase on super-rich: sources to CNBC TV18

-- Revenue Dept assessing impact of rationalisation of commodities, equity taxes

Sector watch | Nifty IT index rises over 1%


BROKERAGE RADAR | ICICI Securities on Hindustan Zinc (HZL)

In line with the company’s guidance, we also downward revise our FY20 volume guidance. For FY20E, we downward revise our zinc and lead sales volume by ~3% and ~7%, respectively, while for FY21E we downward revise our zinc and lead sales volume by ~5% and ~6%, respectively. The recent uptick in zinc and lead prices on the LME augurs well for HZL. We value the stock at 6x FY21E EV/EBITDA and arrive at a target price of Rs 235, maintaining HOLD recommendation on the stock.

MARKET CHECK | Top 5 gainers on the BSE at present


Vodafone Idea reaches out to lenders for debt revamp as losses mount

Vodafone Group Plc’s Indian venture, reeling under $14 billion of net debt, mounting losses and dwindling subscribers, has approached creditors for better payment terms to revive the sinking carrier, people with direct knowledge of the matter said. READ MORE

Market check


India's economic slowdown will reverse in coming quarters: Mukesh Ambani

“As a businessman and as an investor, I am all in, in terms of investing in this country,” Ambani said.
 
“If you look at what happened, yes, there has been a slight slowdown but in my view it’s temporary,” said he. “All the reform measures that have been taken in the last few months will show the outcome. I am quite sure that in the coming quarters this will reverse,” he said. READ MORE
Reliance Industries Chairman Mukesh Ambani

NEWS ALERT | GoM on e-Pharmacy to meet today & deliberate on proposed regulatory mechanism: sources to CNBC TV18

-- Draft rules for the same were released in 2018

PSU banks gain; SBI, Canara Bank, Bank of Baroda and PNB rise 3%

Shares of public sector undertaking (PSU) banks were in focus, rising up to 12 per cent in the intra-day deals on Wednesday. The counters extended their past three days' upmove on the National Stock Exchange (NSE), after the State Bank of India (SBI) reported a good set of numbers for September quarter (Q2FY20). READ MORE 

Indoco Remedies jumps 12% post Q2 results


SBI expects corporate slippages to reduce to less than Rs 12,000 cr: Analyst Meet

Retail slippages to Rs 20,000 crore by FY21. 

MARKET CHECK | Top 5 losers on the BSE at present


BUZZING STOCK | M&M trades near day's high


NEWS ALERT | Govt against JP Associates' proposal in Jaypee homebuyers' case: sources to CNBC TV18

-- Govt to argue against resolution proposal submitted by JP Assoc

-- Transactions of Jaypee Infratech (JIL) and Jaiprakash Associates (JAL) show companies have diverted funds

-- MCA official told CNBC TV18, govt can't risk with 25,000 homebuyers; will ensure NBCC's bids gets approved


BROKERAGE RADAR | Emkay Global Financial Services on Hindustan Zinc

We roll over valuation to the average of FY21/22E EBITDA and value the stock at 6x FY21/22E EV/EBITDA. The stock is trading at 5.9x/4.9x FY21/22E EV/EBITDA est. Maintain Hold with a TP of Rs 242 (10 per cent upside). We move from UW to EW in EAP.

Market check


BROKERAGE RADAR | Reliance Securities on ICICI Bank

We continue to like the Bank for its increased conservatism, relatively low residual corporate stress, strong liability franchise and inexpensive valuation. Marginally tweaking our estimates and raising our target multiple to 2.4x (from 2.1x earlier) for standalone ABV, we maintain our BUY recommendation on the stock with a revised SOTP-based Target Price of Rs 570, which including the value of subsidiaries implies 3.1x of FY21 P/ABV.

Polycab India rallies 8% to hit new high, zooms 65% against issue price

Shares of Polycab India continued their upward march, hitting a new high of Rs 889, up 8 per cent in the intra-day deals on Wednesday. The stock has surged 24 per cent in the past two weeks, after reporting a healthy September quarter results. In comparison, the S&P BSE Sensex has gained 4 per cent during the same period. READ MORE 

Bond vigilantes worry too much: Veteran banker shrugs off fiscal concerns

Ashok Gautam is betting that India will achieve its fiscal-deficit target this year. That makes him something of a rare breed among investors in the nation’s bond market. Gautam, a banker for nearly thirty-five years, is counting on Prime Minister Narendra Modi’s administration’s past fiscal-track record, which shows it can generate funds to plug revenue gaps. That, he said, would remove a major impediment to a debt rally, which could see the benchmark 10-year yield slip to near a three-year low as the Reserve Bank of India cuts rates further. READ MORE 

NEWS ALERT | Tax rate for full year to be less than 25% due to Deferred Tax Credit: Petronet LNG

-- Power sector contributed to volume growth

-- Capex is at Rs 450 cr for the year

BROKERAGE RADAR | Nirmal Bang Research on DCB Bank

CMP: Rs 176
 
Target: Rs 242
 
Recommendation: BUY
 
DCB has surpassed its inflection point in terms of a gradual and continuous reduction in its cost to income ratio as the benefit of over 2x increase in branches post FY15 becomes visible. Although the economic slowdown and run-down of corporate book shall impact the bank during FY20, we remain positive from FY21 perspective, given DCB’s strong presence in the SME and Retail space with no baggage of any legacy asset quality issues. We maintain BUY on the stock and upgrade the target price to Rs. 242 (at 2x of FY21E Adj. BV).

Index Contributors at this hour


News Impact | IndiGo rises over 5% on reports airline places order for 300 Airbus planes


BEML surges 10%, hits 52-week high on report govt plans divestment

Shares of BEML surged 10 per cent to hit a fresh 52-week high of Rs 1,108 on the BSE on Wednesday on report that the government has started the divestment process of the state-owned commercial vehicles' company. READ MORE

Petronet LNG climbs over 6% as Q2 net profit surges 90% YoY

The company's net profit during July-September period stood Rs 1,089 crore, up 90 per cent against Rs 572.89 crore posted in the year-ago period. Revenue from operations, however, slipped to Rs 9,361.18 crore from Rs 10,745.34 crore in the second of the previous fiscal year. READ MORE 

BHEL zooms 14% on reports CLSA upgrades to 'Buy' on divestment plan

State-owned Bharat Heavy Electricals Ltd (BHEL) zoomed 14 per cent to Rs 61.30 apiece on the BSE on Wednesday after global brokerage firm CLSA upgraded the stock to 'Buy' from 'Sell' owing to the benefits that the company could reap due to government's stake sale.
 
According to reports, the brokerage sees "limited risk" in the stock and believes READ MORE

NEWS ALERT | Govt may issue EoI for 26% stake sale in BEML, reports CNBC TV18

-- Defence MInistry, DIPAM held meeting on stake sale on direction of PMO

-- Cabinet nod not required for stake sale

Alert: Govt currently holds 54.03% stake in BEML

HDFC Life Insurance hits new high after multiple block deals

Shares of HDFC Life Insurance hit a new high of Rs 634, up 4 per cent on the BSE in the early morning deals on Wednesday after nearly 5 per cent of total equity of insurance company changed hands through block deals. The stock bounced back 10 per cent from its opening low of Rs 575 on the BSE. It surpassed its previous high of Rs 626, touched on October 23, 2019. READ MORE

NPS' debt assets in AAA-rated papers up by 1.83 percentage point to 37.87%

The National Pension System’s (NPS’) debt assets in AAA-rated papers has increased by 1.83 percentage point to 37.87 per cent, in the one-year period ended September 30, 2019. Over a three-year period, AAA-rated assets have surged 4.8 percentage points.
 
Conversely, assets in AA- and below-rated papers have reduced 87 basis points (bps) in the past year and shrunk by 3.5 percentage points in the past three years. READ MORE

Petronet LNG climbs over 5% post Q2 nos


BHEL surges nearly 10% as CLSA upgrades to BUY


BEML jumps 9% on divestment buzz


Sectoral gainers and losers on the NSE


Top gainers and losers on the S&P BSE Sensex


OPENING DEALS

At 09:17 am, the S&P BSE Sensex was trading 118 points or 0.30 per cent higher at 39,950, while NSE's Nifty50 index was trading at 11,846, up 59 points or 0.50 per cent.

Momentum Picks by ICICI Securities

 

Top gainers and losers on S&P BSE Sensex during Pre-open


Market at Pre-open


Market at Pre-open


BROKERAGE RADAR | ICICI Securities on Supreme Industries

The strong performance of the piping business and solid balance sheet (debt/equity 0.08x) with higher return ratios RoE, RoCE at 22 per cent, 29 per cent reduces short-term concerns in the industrial and packaging segment. We maintain our BUY recommendation on the stock with a target price of Rs 1,420/share.

Rupee Opening Alert

Rupee opens 70.90/$ vs Tuesday's close of Rs 70.84/$ 

Rollover Highlights for Nifty, Bank Nifty and Marketwide

(Source: Nirmal Bang Research)

Stocks to watch: HDFC Life, Petronet LNG, Concor, BEML, NTPC, PVR, telcos

Here's a look at the top stocks that may remain in focus today -
 
HDFC Life Insurance: UK’s Standard Life is planning to divest up to 4.5 per cent stake in HDFC Life Insurance. According to terms of a detail obtained by Bloomberg, the shares will be offered in the range between Rs 562 and Rs 575.
 
Earnings today: Concor, Graphite India, United Bank, Tata Global Beverages, and Tata Chemical are among the 61 companies scheduled to announce their September quarter results today. READ MORE

FII, mutual fund buying takes Indian stock markets close to new highs

The Indian markets are staring at fresh all-time highs, even as foreign and domestic investors have joined forces, following the surprise rate-cut announcement by the government last month. The benchmark Sensex and Nifty had gained more than 10 per cent since September 19, when they had ended at seven-month lows.
 
During this period, foreign institutional investors (FIIs) have pumped in nearly Rs 17,000 crore, while mutual funds (MFs) have been net buyers to the tune of Rs 9,000 crore. Currently, the Sensex is only 1 per cent away from its record high of 40,268 made in early June. Another 2 per cent gain in the Nifty could see the 50-share index surpass its previous record of 12,089 logged on June 3. READ MORE

Govt mulls more steps to boost market sentiment, may scrap DDT, rejig LTCG

The government and regulators have had a few rounds of discussion over the taxation system for share markets in the past few days, said official sources, adding that the government feels the DDT might be acting as a hindrance to the inflows of foreign investment in the country. READ MORE

NEWS ALERT | There's no deviation in utilisation of rights issue proceeds: Bharti Airtel, reports CNBC TV18

-- Co says, monitoring report issued by Axis Bank for September-ended quarter

Govt mulls more steps to boost market sentiment, may scrap DDT, rejig LTCG

The finance ministry and regulators are reviewing the possibility of scrapping the dividend distribution tax (DDT) in a bid to regain investor confidence in the equity markets, said sources in the government. It is also considering rationalisation of the long-term capital gains (LTCG) taxation structure by classifying three asset classes against six at present. READ MORE

Plans to cut debt, rack up gains via cost cutting perk up Tata Motors stock

The Tata Motors stock gained about 17 per cent on Tuesday on the back of brokerage upgrades owing to a better-than-expected September quarter performance at its British unit, Jaguar Land Rover (JLR). Plans to reduce debt and rack up gains through cost cutting also perked up the Tata Motors stock.
 
The stock has, over the last two trading sessions, gained 36 per cent. While analysts have pointed out multiple triggers for this, what has led to the upgrades is the operational turnaround at JLR. READ MORE

Technical calls by Religare Broking: Buy Dabur, HDFC, Hero Motocorp

Dabur India
 
Recommendation: Buy
 
Last Close: Rs 465.85
 
Initiation range: Rs 462-466
 
Target: Rs 490
 
Stop loss: Rs 450
 
We’re seeing a mixed trend in the FMCG space wherein DABUR is showing tremendous strength. After retesting the record high, it has witnessed a marginal dip of late, offering fresh buying opportunity to those who missed the chance earlier. The chart pattern combined with the existence of strong support at 450 levels is further adding to the positivity. We advise creating fresh longs in the given range. READ MORE

Bulk deals on BSE as on Tuesday

Bulk deals on NSE as on Tuesday

FII/FPI & DII trading activity on NSE, BSE and MSEI


Rupee Check

Source: Bloomberg


Oil Check

At 8:08 am, Brent Crude Futures was at $61.03 per barrel.

SGX Nifty

At 8:05 am, the Singaporean Exchange for Nifty Futures was at 11,810-levels, up 4 points or 0.03 per cent.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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